India’s poor export infrastructure remains a major limitation on its export competitiveness. Discuss. Enumerate some of the steps the government of India is taking to improve our export infrastructure.
• Introduce with the need for export competitiveness
• List shortcomings in export infrastructure
• What steps were taken to improve export infrastructure
• Conclude appropriately
Model Answer :
Over the last 25 years since India’s liberalisation, its foreign trade has expanded multifold. But India’s share in World Merchandise Exports over the last few years remained at around 1.7%. India’s poor export infrastructure remains a major limitation on its export competitiveness.
Shortcomings in export infrastructure:
1.Ports Infrastructure: Indian ports lag behind international standards, have inadequate capacity to handle high-volume trade flow and have high turn-around time. Lack of trans-shipment hubs and high level of manual operations are other concerns.
2.Poor hinterland connectivity: Limited hinterland linkages increase the cost and time of transportation and cargo movement.
3.Airport infrastructure: The cargo volume handled by Indian airports is very less as compared to major international airports. The major bottlenecks are lack of competitive air cargos, congestion at terminals, lack of specialized storage for hazardous and vulnerable cargo, slow cargo clearance etc.
4.IT Infrastructure: This includes lack of facility for electronic payment of fees, duties, taxes etc. at the customs stations.
5.Warehouses and Coldchains: India lacks capacity in warehousing and coldchains which is a big concern, especially for perishable goods.
To improve the export infrastructure GOI is taking following steps:
1.Modernization of Infrastructure: GOI is undertaking modernization of infrastructure, including port modernization, upgradation of Air cargo facility at major airports, Dedicated Freight Corridors, network of national highways and waterways.
2.Sagarmala: The Sagarmala initiative was launched with objectives of port modernization and creating efficient evacuation system and hinterland connectivity.
3.Multimodal Parks: Multi Modal Logistics Parks are being set up at various locations, to act as hubs for freight movement, and enhance connectivity with road and rail and other modes of transport to promote multimodal freight transportation.
4.Logistics Performance Index: The commerce ministry is working on a Logistics Performance Index (LPI) for states and union territories, which will promote competition by ranking them as per their trade related facilities.
5.TIES Scheme: Tje Union Commerce Ministry in 2017 launched a new scheme Trade Infrastructure for Export Scheme (TIES) to provide assistance for setting up and up-gradation of infrastructure projects with overwhelming export linkages.
India needs to increase its share in world exports to boost growth and jobs as well as reduce trade deficit. Renewed focus on export infrastructure is welcome and needs to be sustain to improve India’s export competitiveness and economic growth.